'What Obama’s second term means for Asia' EASTASIAFORUM November 11, 2012

Economics, Politics and Public Policy in East Asia and the Pacific

What Obama’s second term means for Asia

November 11th, 2012

Professor Archarya article, "What Obama's seond term means for Asia" was published by the EASTASIAFORUM on November 11, 2012.

Although Asian stock markets are buoyed and governments relieved by Barack Obama’s re-election as the 44th President of the United States, major uncertainties loom in the Asia policy of the second Obama administration.

The first and foremost challenge lies in making the US policy of ‘rebalancing’, formerly known as ‘pivot’, credible to its Asian partners. Rebalancing involves diverting the greater part of US military resources to Asia, including new deployments such as stationing 2500 marines in northern Australia. Obama’s victory might reassure Asian countries about the rebalancing policy becoming a reality. But this is far from certain, short of a dramatic turnaround in the US economy. There is a widespread perception in Asia that the United States may not have the economic wherewithal to implement the strategy.

As Major GeneralPan Zhenqiang, a former director of the Institute of Strategic Studies at China’s National Defense Universityput it,‘rebalancing is expensive. At a time when the US is determined to dramatically cut back its military budget, and reduce its worldwide security commitments, the actual commitment Washington could really afford in the Asia-Pacific is anybody’s guess’. And the Chinese are by no means alone in such thinking. It is fairly widespread among other Asian countries, fuelled by the impending US ‘budget cliff’. In fact, Romney had made a clearer promise of not allowing large-scale defence cuts in congressionally mandated sequestration, which calls for US$500 billion in automatic cuts to defence spending if Congress does not pass a deficit reduction bill by 2 January 2013. That deadline comes before Obama’s second inauguration. Combined with US$487 billion in cuts already underway, the shrinking defence budget undermines the rebalancing approach. Also important is the impact of the cuts on the procurement of key equipment such as F-35 fighters and Virginia-class attack submarines, crucial to US military readiness in Asia at a time when China’s air and submarine capabilities are growing.

The second challenge concerns relations with China. During its first term, the Obama administration provoked China’s anger by condemning its sweeping territorial claims and military assertiveness in the South China Sea. During the campaign, each candidates accused the other of failing to stand up to China: the Romney camp accused Obama of not condemning Chinese currency manipulation, while the Obama camp accused Romney of helping companies that shipped American jobs to China and doubted whether a Romney administration could crack down on Chinese dumping in the American market. This could be dismissed as election rhetoric, and Asian (including Chinese) analysts seem to regard Obama as a more moderate voice than Romney in dealing with trade and finance disputes with China. With China’s own leadership change over, one might expect a period of stability in bilateral relations under the second Obama administration. Yet Chinese suspicions of the US rebalancing policy as being a new form of containment would conflict with the administration’s desire to pursue a more constructive relationship with Beijing.

The third challenge is sustaining America’s engagement on the multilateral front. One of the key policy initiatives of the Obama administration in Asia was its closer engagement with multilateral regional institutions. It strengthened relations with ASEAN, joined the East Asia Summit (EAS) and pursued the Trans-Pacific Partnership (TPP). Regionalism was no longer ‘a solution in search of a problem’, as the George H.W. Bush administration once famously put it, but integral to the US strategy of sustaining influence in the region at a time of rising Chinese power. Multilateralism is likely to continue under Obama II, but there could also be possible disillusionment with a lack of concrete deliverables. The progress of the TPP has been slow and the prospects for Japanese participation, which would give it a boost, remains elusive. The future of the EAS also remains uncertain: exactly what would its role be in enhancing regional security? Will it grow into a viable regional security institution able to prevent and resolve conflicts as Secretary of State Clinton anticipated in 2010? There is no guarantee that the enthusiasm shown by the Obama administration for multilateral engagement with Asia will continue indefinitely in the absence of concrete outcomes supporting US strategic interests in the region.

There are a number of other challenges too: how to keep Myanmar’s political opening going (on which the announcement of an early presidential visit puts Obama on the front foot), while international criticism mounts over the plight of the Rohingya Muslim minority there; how to develop closer strategic engagement with India in the face of domestic sentiments there for ‘multi-alignment’ or ‘non-alignment mark 2’; how to deal with looming chaos in Afghanistan after the withdrawal of the last US troops; and how to rebuild the strategic alliance with Japan at a time when Tokyo is increasingly nervous about Chinese nationalism and military power.

But, ultimately, Asian security is not a function of who occupies the White House. The emerging powers of Asia must also bear responsibility for maintaining order if the one that America built collapses. Asia is clearly in the midst of a power drift. Uncertainties about the future of American military power will persist, given legitimate doubts over whether rebalancing will work or will suffice in arresting the expansion of Chinese military power. At the same time, the Asia policy of Obama II will have to navigate what appears to be an increasingly leaderless world. The last time the world was so leaderless in the midst of a severe economic crisis was between the two world wars. Then, Britain as the reigning world power was unable to lead, whereas America as the emerging superpower was unwilling. The result was catastrophic. Today, the US is less able to provide leadership while emerging power China is neither a ready nor acceptable alternative. There has been much said about an Asian Century, but the key Asian powers are too busy competing with each other to offer even a semblance of regional or global leadership. The second Obama administration will need to actively encourage a shared role for and with Asia in fostering regional cooperation and global governance.